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Tuesday, September 23, 2014

Toyota Motors to bring a mid-sized sedan against Honda City

Toyota Motor is developing a mid-size sedan for the Indian market where it will likely take on rival Honda Cars India's City, the top-selling car in the segment. The development work has already begun and the car is expected to hit the market at the end of 2016, three people with knowledge of the company's plans said. It will be based on the Etios platform and is internally code-named Etios C or Etios Core, they said. The car will be positioned between Toyota's existing entry-level sedan Etios and the globally popular Corolla Altis. The decision was made after conducting several feasibility studies over the past few years, these people said.

A spokeswoman at Toyota Kirloskar, the local joint venture of the Japanese major, said the company "would like to refrain from commenting on any future products or plans". Toyota, the No. 1 auto-maker globally, hasn't had a good run in the sedan segment in India, though the Corolla has been a reasonable success. The Etios that it developed targeting India's price-conscious consumers didn't find many buyers. The hatchback version of the vehicle, the Liva, too hasn't posed any threat to rival models from Maruti Suzuki and Hyundai Motor. However, in the utility vehicle space, Toyota is the leader with the Innova, and its Fortuner sport-utility vehicle too, has been a runaway success.

The mid-size market comprises cars priced between Rs 8 lakh and Rs 13 lakh. The local unit of Toyota has never been to this market where volume has shrunk a bit but is still big — mid-size sedan totaled 1.55 lakh in the fiscal year through March 2014. The recently introduced Ciaz is Maruti's renewed attempt to capture the market, where Hyundai's Verna is the No. 2. One of the people cited above said Toyota is working on a potential annual volume of 40,000-50,000 units."This product will be a significant offering from Toyota since its launch of the Etios and Liva did not deliver the desired volumes. The company is hopeful that the incremental volumes of the new sedan will help it utilise the second factory better," this person said.